How to Build Credit With a Credit Union

Credit unions provide members with the same kinds of products and services that you can obtain from banks. If you have very little credit history or poor credit, credit unions offer certain kinds of accounts that can help you to build your credit. When you improve your credit score, you can obtain credit more easily and pay less to borrow. However, not everyone can join a credit union so before you can start working on your credit you must first find a credit union that you are eligible to join.

Instructions

1

Call credit unions in your area and find out whether you meet the membership eligibility requirements. Some credit unions base membership on where you live while others base membership on where you work. If you qualify to join more than one credit union, choose the one that offers the widest variety of products and services at the lowest cost.

2

Contact Equifax, Experian and TransUnion online or over the phone to obtain your free annual credit reports. Review the reports for accuracy and if you find any inaccurate information, contact the credit bureau in question to correct the info. It can take several weeks for corrections to show up on your report, so do not open any accounts at the credit union until errors on your credit report have been corrected. Correcting errors may improve your credit score and make credit easier to obtain.

3

If necessary, find a family member or friend willing to act as a co-signer for a loan or credit card. Go to credit union with your co-signer and submit an application for credit. You only benefit from having a co-signer if that person has good credit and sufficient income to qualify for the loan. Also that person must meet the credit unions membership eligibility guidelines. In many instances, if you are unable to qualify for a loan by yourself, you can qualify for a loan if you have a well-qualified cosigner.

4

Open a deposit account if you cannot find a willing co-signer. Submit an application for a secured credit card or cash secured loan. Generally, you can borrow an amount equal to the sum of money that you deposit in your account. The credit union places freeze on the deposit account so you cannot access that money until you have paid off your debt. Cash secured debts and credit cards are reported to credit bureaus in the same way as unsecured debts. Therefore, these types of loans enable you to improve your credit score. If you make your payments on time then over the course of many months you gradually improve your credit score.